Airbus revises up jet demand, warns of ‘lose-lose’ tariff war

LONDON - Airbus raised its 20year forecast for jetliner demand on Wednesday despite expected slower growth in traffic, as it predicts airlines will replace aging fleets with smaller, more fuel-efficient new planes.

The industry faces a squall of new pressures from trade tensions, the partial unwinding of globalization and an anti-flying campaign from climate activists, notably in Europe.

Airbus Chief Commercial Officer Christian Scherer voiced alarm about the prospect of a tit-for-tat tariff war between the United States and Europe after the World Trade Organization signaled that Washington can impose sanctions in a long-running dispute over aircraft subsidies.

The European planemaker expects demand for new planes to be led by Asia, where the industry has been enjoying a boom in demand due to the growth of cities and a burgeoning Asian middle class.

Demand from China is expected to leapfrog the United States and Western Europe, while India and new manufacturers like Vietnam are growing the fastest.

In its annual long-term forecast that sheds light on world trends, Airbus predicted the world’s fleet would more than double to 47,680 jets by 2038.

Airbus expects airlines and leasing companies to take delivery of 39,210 new passenger jets and freighters over the next two decades compared to 37,389 previously forecast, as airlines seek to tap into the fuel savings offered by newer jets.

It shaved its 20-year forecast for average traffic growth to 4.3% a year from 4.4%.

Airline traffic growth has slowed this year amid trade tensions between the United States and China.

“Increased protectionism and other geopolitical risks remain a concern,” Airbus said in its Global Market Forecast.

Scherer said possible sanctions related to the dispute with Washington over aircraft subsidies had so far had no impact on U.S. demand for Airbus jets.